The owner of British Gas became the last major company to cut thousands of jobs in the aftermath of the Covid-19 crisis.
Centrica announced yesterday that it will cut 5,000 positions to accelerate cost-cutting plans, a blow that came as chemical company Johnson Matthey announced plans to lay off 2,500 other employees and Bombardier Aerospace announced that 600 jobs would go to Northern Ireland.
Heathrow Airport also said it would downsize after the number of passengers dropped.
Centrica said it will cut 5,000 jobs while chemicals company Johnson Matthey has announced it will cut 2,500 more employees and Bombardier Aerospace has said 600 jobs will be cut in Northern Ireland
In recent weeks, Rolls-Royce, British Airways, Easyjet, Virgin Atlantic and BP have all announced reductions, with the job merger having canceled tens of thousands of roles so far.
The latest unrest comes after official figures show that just under 9 million workers have now been “put on leave” by their employers as part of the government’s job retention program.
Economists – including officials from the Bank of England – say the bailout announced by Chancellor Rishi Sunak, which has cost nearly £ 20 billion so far, will save many jobs.
Critics, however, fear that the system will be used by some companies as a “waiting room” for layoffs and that many more workers may soon be cut.
A series of companies – including British Airways, Virgin Atlantic, Rolls-Royce and now Centrica – have put thousands of workers on retirement to announce mass layoffs a few weeks later.
Business leaders have warned that the situation would get worse if the government persisted with the 2-meter social distance rule.
Many companies, including pubs and restaurants, say it is impossible to operate under these circumstances, with around one million jobs at risk in the hospitality industry alone.
The Organization for Economic Co-operation and Development (OECD) warned on Wednesday that unemployment could almost triple to 11.7% in the summer – or worse if a second lock-up is needed. This would amount to more than 2.5 million job losses.
At Centrica, which employs around 27,000 people, the job cuts follow on from 4,000 already planned this year, which were announced in 2018.
The firm – which has cleared 3,800 workers – said more than half of the job cuts are in management, as part of plans to save £ 2 billion in savings by next year.
Economists – including Bank of England officials – say Chancellor Rishi Sunak’s bailout, which has cost nearly £ 20 billion so far, will save many jobs
CEO Chris O’Shea said: “I really regret that these difficult decisions will have to be made and I understand the impact on the colleagues who will leave us.
However, the changes are designed to stop our decline, allow us to focus on our customers and create a sustainable business. “
Mark Pettifer, regional manager of the Unite union, said: “The job losses are another blow to the already fragile British economy and have created worrying uncertainty among the entire workforce.”
Johnson Matthey, which manufactures catalytic converters used in cars, has announced its job cuts because it also revealed that it was halving its dividend due to the financial consequences of the pandemic.
The layoffs will see about a sixth of its workforce leave in just three years, after Covid-19 deducted £ 60 million from its profits. The dividend is reduced to 31.1p per share.
Bombardier, which is cutting 2,500 jobs worldwide, said 600 jobs were being cut from its factories near Belfast due to “extraordinary disruptions and challenges in the industry.”
The pandemic effectively interrupted most international travel, paralyzing the demand for new aircraft.
It also hammered Heathrow, which revealed yesterday that the number of passengers had dropped 97% in May compared to the same period a year ago.
CEO John Holland-Kaye said it was “no longer sustainable” to try to protect jobs, especially after the government introduced a 14-day quarantine for anyone traveling to the Kingdom -United.
Heathrow directly employs 7,500 people, but Kaye warned that 25,000 jobs were at risk. This includes layoffs already announced by British Airways, Virgin Atlantic and other companies.
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